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Provider – Payer Consolidation Continues

Provider – payer consolidation continues with Highmark, a Pittsburgh insurer, acquiring Allegheny Health Systems. These systemic shifts in the healthcare landscape will drive new alliances and structures in the entire continuum of care.

Among these new structures will be the need for state commerce or insurance departments to align their jurisdictional responsibilities for insurance solvency with the provision of care, currently the domain of state departments of health and medicine. We enter somewhat uncharted territory. Insurance regulators will likely be added to the list of players looking to shape the reduction in healthcare costs.

These new affiliations and relationships will begin to place upstream pressure on pharma and device suppliers to take a more active role in reducing the cost of care. Pharma has begun that process by actively reducing its selling expense. Device companies have an opportunity to contribute to cost reduction by more thoroughly examining its selling and general administrative expense.

Market and governmental forces will continue to place downward pressure on therapy prices. It remains to be seen how market participants respond.


Published on by Sheepish Design.